Velarde questioned why the government waited until this September to indict his client if no money laundering activity was done by Delgado since 2008.

Fry responded by spelling out two financial transactions he said took place after 2008 but that were not listed in the indictment against Delgado.

Velarde said that neither of those two transactions was drug related and said the investigation on the cash moved from Chicago was closed by the end of 2008.

At that point, Fry stated that Delgado went to Cuba to engage in "mass sexual activity with underage women." Fry didn't explain how that was relevant to the money laundering investigation. Calls to the U.S. attorney's office were not immediately replied.

Delgado's arrest Friday surprised those who knew him in El Paso.

"This came totally out of the blue. I still don't believe it," said Ralph Adame, a businessman who has served on the board of the Ysleta Educational Foundation with Delgado. The organization provides scholarships to deserving students in East El Paso.

Adame says he was very close to Delgado about five years ago. "He is a lot of fun, cultured. He knows his liquor, knows his food, he is a great host." Delgado didn't come from a wealthy family, Adame said, "but he did well."

Benita Neumann, executive director of the Ysleta Educational Foundation, said in an email that Delgado has been a member since 2005 and that he serves on "numerous boards and nonprofit organizations."

Richard Barraza, another friend of Delgado and a wine wholesale importer, lamented that the government can release information on a defendant before he is found guilty.

"He is done. The accusation will completely destroy him. People are afraid and embarrassed to say they know him," Barraza said. "They have tarnished him forever."

A profile later removed from Carnegie Mellon University's website says he left his professional duties to work with Mexico's President-elect Enrique Pena Nieto. Pena's team denies knowing Delgado. The university says the biographical information was submitted by Delgado.